The Washington Consensus: Assessing a Damaged Brand

42 Pages Posted: 8 Jun 2010

See all articles by Nancy Birdsall

Nancy Birdsall

Center for Global Development

Augusto de la Torre

UDLA, Centro de Investigaciones Económicas; Columbia University, SIPA

Felipe Valencia Caicedo

Vancouver School of Economics

Multiple version iconThere are 3 versions of this paper

Date Written: May 4, 2010


In this paper we analyze the Washington Consensus, which at its original formulation reflected views not only from Washington but also from Latin America. We trace the life of the Consensus from a Latin American perspective in terms of evolving economic development paradigms. We document the extensive implementation of Consensus-style reforms in the region as well as the mismatch between reformers’ expectations and actual outcomes, in terms of growth, poverty reduction, and inequality. We then present an assessment of what went wrong with the Washington Consensus-style reform agenda, using a taxonomy of views that put the blame, alternatively, on (i) shortfalls in the implementation of reforms combined with impatience regarding their expected effects; (ii) fundamental flaws - in either the design, sequencing, or basic premises of the reform agenda; and (iii) incompleteness of the agenda that left out crucial reform needs, such as volatility, technological innovation, institutional change and inequality.

Keywords: Stabilization, Reform, Financial Markets, Macroeconomic Policy, Government

JEL Classification: E63, P11, B25, N16, N26, N46

Suggested Citation

Birdsall, Nancy and de la Torre, Augusto and Valencia Caicedo, Felipe, The Washington Consensus: Assessing a Damaged Brand (May 4, 2010). Center for Global Development Working Paper No. 213, Available at SSRN: or

Nancy Birdsall (Contact Author)

Center for Global Development ( email )

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Augusto De la Torre

UDLA, Centro de Investigaciones Económicas ( email )

De los Granados y De los Colimes, Esquina
Quito, Pichincha

Columbia University, SIPA ( email )

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New York, NY
United States

Felipe Valencia Caicedo

Vancouver School of Economics ( email )

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Vancouver, BC V6T 1Z1

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